Another Example Of Why Transparency Is Critical During Bankruptcy Filing

We recently discussed the plea deal reached with “Real Housewives of New Jersey” stars Joe and Teresa Giudice. In that case, the couple agreed to plead guilty to multiple counts of fraud related to important financial information that was never disclosed to the federal bankruptcy court judge overseeing their Chapter 7 filing. Now that they have pled guilty, experts say each faces several years behind bars for their crimes, underlining how serious lying to a bankruptcy judge can be.

Another example of how important it is to be honest when filing a bankruptcy claim comes from California, where businessman Steven Zinnel was recently sentenced to 17 year in prison for his bankruptcy fraud. In Zinnel’s case, much of his fraud revolved around an intense desire to deprive his ex-wife of money. Zinnel told her when they first filed for divorce in 1999 that he intended to hide money, file for bankruptcy and do whatever it took to avoid giving her a dime in child support money.

Prosecutors say these were not idle threats and that Zinnel went about doing exactly that. Zinnel concealed millions of dollars of assets in other people’s names, relied on trust funds set up by close friends to funnel money to himself and hid overseas companies behind a labyrinth of shell owners. All this to avoid paying child support? According to prosecutors, Zinnel’s hatred of his ex ran so deep he never gave the scheme a second thought.

So how did he get caught? Turns out he is actually to blame for his own downfall. At one point, he decided to call the FBI and ask them to investigate his ex-wife for a range of vague, supposed criminal offenses. The FBI opened an investigation, which quickly became centered on Zinnel. It didn’t take long to unravel his financial web of lies, which led to his current legal predicament.

Prosecutors have said that the case shows that those filing for bankruptcy cannot lie to the court about their assets and then continue lying to the detriment of their creditors without facing stiff repercussions. To avoid such trouble, it’s best to work with your bankruptcy attorney to craft an absolutely honest and transparent application, being sure to double-check everything so that nothing is left out.

If you find yourself needing the services of a Charlotte, North Carolina bankruptcy attorney, please call the skilled lawyers at Arnold & Smith, PLLC today at (704) 370-2828 find more resources here. As professionals who are experienced in the bankruptcy arena, our attorneys will provide you with the best advice for your particular situation.

About The Author:

Bryan Stone is a Partner with Arnold & Smith, PLLC where he focuses his practice on all aspects of bankruptcy, including: Chapter 7, Chapter 11, Chapter 13, home loan modifications and landlord tenant issues. Originally from Macon Georgia, Mr. Stone attended the University of Georgia for a BBA in Banking and Finance and went on to Wake Forest to earn his law degree. After law school Mr. Stone relocated to Charlotte where he has become quite involved in many local organizations. He is currently the Chair of “Bravo!” the young professionals organization of Opera Carolina, he also founded the UGA Alumni Association of Charlotte. In his spare time he enjoys perfecting his BBQ skills for the annual “Q-City BBQ Championships” and playing softball with the Mecklenburg County Bar Softball League.